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Its about that time of the year when the Government will start accepting cap subject H-1B petitions for the Fiscal year 2013, which starts on October 01, 2012. The Obama Administration promised to Silicon Valley recently that they would ease the immigration laws for High Tech graduates. Yet for small computer consulting companies, the outlook seems bleak.

Computer Consulting Companies specialize in recruiting and placing consultants in bigger companies. Many times one consulting company has contract with another who then in turn has a contract with a big company. This is the nature of their business. In 2010, the Government in a memo created a new law that the employers should have “Direct control” over their employees. The Government then said that where there are intermediates between the employer and the end user of the employee, the employer does not have control. The government requires a huge amount of proof and often letters from the end user saying that they don’t control the employee. The end users often refuses to bother with such things. After all, if they wanted the hassle of an employee-employer relationship, they would recruit themselves.

The burden on small consulting companies is onerous. In a recent memo, the Government has said that they don’t require any particular type of document, including letters from the end user, but the companies have to prove by a preponderance of evidence that they control the employee. And the Government of course gets to decide whether there is preponderance of evidence. This is like the fox guarding the hen house. Also very often contracts are given for a short duration, and is thereby extended. But letters from the end user that the contract may be extended is not enough. The Government will make the duration of the H-1B for a few months for the duration of the contract. Then the petitioner has to file again.

If the Government denies an H-1, the beneficiary has to leave the country. An appeal takes forever and is simply not cost efficient for the Petitioner to do. So the government gets away with whatever they want. So very few of these cases make it to the Judiciary. In a recent case, Residential Financial Corporation, 2:12-cv00008, the Government challenged whether the Court has jurisdiction since the plaintiff did not ask specifically to get the beneficiary back. The federal Court (Southern District of Ohio) said that the Government did not provide the Employer and employee , “A Bare minimum level of professionalism, diligence and reasoning.”

And that is how the H-1B petitions are being adjudicated. Of course getting the visa form a consulate in India is harder and more capricious, but that will take pages and another blog.

U.S. State Department data shows that it was a tough year to transfer an employee from India to the United States in 2011.

L-1 visas were especially tough to obtain at U.S. posts in India during fiscal year 2011 as 28 percent fewer applications were accepted than were in FY 2010, according to the National Foundation for American Policy. The numbers dropped from 35,896 to 25,898.

Meanwhile, the number of L-1 visas granted in the rest of the world went up by about 15 percent.

“The denial rates at some of the U.S. posts in India are going to become a serious problem for American companies,” said Houston immigration attorney Annie Banerjee. “This will hurt productivity for American companies who need to transfer their Indian employees. This should be an easy process – especially in a down economy.”

The U.S. Chamber of Commerce represents many of the large corporations that use L-1 visas to transfer executives and managers from around the globe to the United States for work. The official statement from the chamber indicated frustration with the data and a desire to improve the approval rates.

Corporations fear a change in policy will continue to make it difficult to bring Indian employees to the United States and that could slow down business, according to the NFAP report.

“I hope the State Department resolves this discrepancy quickly because it is American companies that will suffer if they cannot continue to look to India for skilled executives and managers in technology and other fields,” Banerjee said. “Some of these industries could have to change their business model.”

Annie Banerjee is an immigration attorney with experience helping companies get L-1 visas for their employees.

Immigration officials launched a new program called Entrepreneurs in Residence in late February with an information summit at Moffett Field, California’s NASA Research Park.

The summit was a long-awaited breakthrough for critics of U.S. immigration law ¨C particularly as it pertains to visas for post-graduate professionals.

U.S. Citizenship and Immigration Services started the Entrepreneurs in Residence program last October to gather industry expertise from both the private and the public sector in an attempt to spur job growth through the employment based visa program.

More than 150 representatives of the business community, government agencies and academia attended the summit to help USCIS use immigration law reform as a tool to promote entrepreneurship and bolster American prosperity, according to a press release from USCIS.

“The introduction of expert views from the private and public sectors will help us ensure that our policies and processes fully realize the immigration laws’ potential to grow our economy and create American jobs,” Mayorkas said in the release.

The summit was organized to give some direction to the Entrepreneurs in Residence’s new tactical team. The tactical team is made up of USCIS employees and business experts working to create clear, consistent immigration pathways for foreign entrepreneurs. All of this is being done to align visa policy with current business realities, according to the release.

The team is designed to streamline USCIS policy across all of the non-immigrant visa categories that entrepreneurs use in business.

The slowdown of the U.S. economy since the financial and housing market crash of 2008 has inspired the USCIS to begin thinking of ways to affect economic growth through smart visa policy. This inspiration has happened, in part, because of the chorus of voices from the technology industry begging for reform.

USCIS announced the Entrepreneurs in Residence initiative during President Barak Obama’s Council of Jobs and Competitiveness in Pittsburgh in October of 2011.

At the February summit, Mayorkas recognized five entrepreneurs who are American immigrants as Outstanding Americans by Choice. Those five entrepreneurs, who are now naturalized citizens, are researcher and writer Vivek Wadhwa; Michael Moritz, partner at Sequoia Capital; Christopher Che, president and CEO of the Che International Group; Shervin Pishervar, managing partner at Menlo Ventures; and Ping Fu, president and CEO of Geomagic.

The Outstanding American by Choice is an honor given to naturalized citizens for achievements in professional achievement, civic participation and responsible citizenship.

Mayorkas also performed a naturalization ceremony, welcoming 20 Silicon Valley residents to become U.S. citizens.

The Visa Waiver Program allows foreign nationals from certain countries to visit the United States for business or leisure for 90 days or less without going through the hassle of obtaining a travel visa.

There are a number of criteria a country must meet to participate in the program. At least one of the program’s requirements is being reviewed by Congress.

Here are some of the criteria participating countries must meet to be a part of the program.
• Must have a reciprocal program with the United States
• Must issue secure, machine-readable passports
• Must be on track to include biometric identifiers in passports
• Must report theft of blank passports to the U.S. Department of State
• Must have a low nonimmigrant refusal rate.

Refusal rates are used as a measure of the likelihood a foreign national would overstay his or her trip to the United States.

Critics argue that the overstay rates themselves would be a better measure of the propensity of a person on a business trip or vacation to stay beyond his or her allotted 90 days.

Refusal rates can be skewed if the same person is refused several times, for example. By comparison, nationals from a country with a high overstay rate likely need a visa from the State Department before visiting the United States.

There are bills before the U.S. House and Senate that would replace refusal rates with overstay rates among other tweaks to the program.

There are 36 countries in the Visa Waiver Program. About 40 million people visit the United States every year for business or vacation. Among those, almost half enter the United States from countries participating in the Visa Waiver Program, according to the Congressional Research Service.

The State Department has been under some pressure during the down economy to loosen restrictions on business and leisure travel to the United States. Travel and tourism can be a big boost on a struggling economy.

But the State Department and the Department of Homeland Security have a responsibility to keep people out of the country who pose a threat to law and order or national security. There also is political pressure to keep foreign nationals out of the country who intend to stay here illegally.

There also is a movement to expand the number of countries who participate in the Visa Waiver Program. Adding countries to the list would increase the number of visitors from those countries for both business and recreation. An expanded list might also be better for security.

The United States gets more information and more useful data about counterterrorism and criminal enforcement from member nations than it does from non-member nations.

A few days ago, the Director of United States Citizenship and Immigration Service, Mr. Mayorkas said that the United States Citizenship and Immigration Service (USCIS) would make the process for foreign born tech start up companies’ immigration easier with the highly touted “Entrepreneur in Residence” Program. The goal he said was to keep foreign born entrepreneurs in the US. Everyone applauded, but it takes years to introduce a new program. Meanwhile, the existing visas are not available for tech start ups. A start up cannot have H-1B visas, especially is the beneficiary owns part of the business. Bill Gates, if he was an immigrant, would not be able to get an H-1B visa, or a Green Card from Microsoft because (a) He didn’t have a “Computer Science Degree”, (b) He owned Microsoft, and (c) Microsoft as a start up would not have the ‘ability to pay’ Gates. Same is true for Sergey Brin and google, although Brin did have a Comp Sci degree., or Zuckerberg and Face Book.

If the Government wants to make it easier for Computer Science Graduates from US Universities, it certainly does not look so. Since January 2010, the CIS issued a memo, which introduced an element stating that Employers should have direct control over H-1B employees. That effectively killed the H-1B visa for Computer Consulting industry.

And recently, the Department of Labor has taken to auditing a lot of labor certifications (PERMS) . I can understand the auditing of Perms for jobs not requiring a highly skilled degree. But these audits are done in random and effects everybody. So we have one hand of the Government stating that we need to keep our tech graduates, and the other hand doing everything to make it harder for them. Maybe someday the Government will work as a cohesive unit.